## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Ross Advertisin g, Inc. v. Heartland Ban k & Trust Co. , 2012 IL App (3d) 110200

Appellate Court Caption ROSS ADVERTI SI NG, I NC., CHARL ENE J

. DEVORE, MARK J

. DOOL I TTL E, A RT H U R WAY N E F L I T TNER, and DAVI D A. GOERS, Plaintiffs-Appellants, v. HEARTLAND BA NK AND T R UST COMPANY, an I llinois State Ba nk, and DON S HA FER, DefendantsAppellee s.

District & N o. Third District Docke t No. 3-11-0200

Filed May 22, 2012

Held (Not e: Thi s syl lab us

con st i t ute s no par t of the opi nio n of the cour t but has bee n pre

par ed by the Repo r t er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) In an action aga i nst defe ndant bank and an office r alleg ing brea ch of
contra ct, brea ch of the implied duty of g oo d fa i t h and fair dealing and tortious interfe renc e with contra ct and business relations arising from the termination of pl aintiffs’ line of cre dit, the placeme nt of a hold on their bank acc ount and other actions to enfor ce plaintiffs’ obligations to the bank, the entry of summary judgme nt for defe ndants was aff irmed, since defe ndants’ actions complied with the terms of the loan docume nts executed by plaintiffs and plaintiffs’ cla ims were ba rre d by res judicata or collate ral e stoppel.

Dec ision Under Review Appea l f rom the Circuit Court of Peoria County , No. 10-L -17; the Hon. Scott A. Shore, J udg e, pre siding.

J udg ment Affir med.Counsel on

Appea l Samuel B. Z abek and Thomas E. L eiter, both of L eiter Group, of Peoria, for a ppellants.

Timothy J

. Howar d and Gr aciela M. Z amudio, both of Howar d & Howar d Attorney s, PL L C, of Peoria, for appellee s.

Panel J USTI CE HOL DRI DGE delivere d the judgme nt of the court, with opinion.
J ustices Carter

and Wrig ht concur

red in the judg ment and opinion.

OP INION

¶ 1 This case involves claims broug ht by a cor porate borrowe r and its guara ntors ag ainst a lender

. De fe ndant, Heartland Bank and Trust Company (He artland)
, issued plaintiff, R oss Adver tising, Inc. (Ross), a $750,000 re volving line of cre dit for one y ear secur ed by a promissory note executed by Ross and g uara nteed by individual plaintiffs, Charlene J

. Devor e, Mark J

. Doolittle, Ar thur Way ne Flittner, and David A. Goer s. The plaintiffs filed

a co m plaint ag ainst Hea

rtland and its loan office r, Donald L

. Shafer (Shafe r), which t h e circ uit court dismiss ed. T h e p l ai ntiffs subsequently filed an amende d complaint in three
counts (t h e co m p l aint). In count I
, Ross asser ted a claim ag ainst Hea

rtland for brea ch of
contra ct and bre ach of

the implied duty

of g ood and fa ir dea ling. I n count I I
, Ross a sserted

a claim ag ainst Hea

rtland and Shafer for tortious interfe renc e wi t h contra ct and business relations. In count I I I
, the plaintiff g uara ntors asser

ted claims ag ainst Hea

rtland and Shafer for tortious interfe renc e with contra ct and business re lations. ¶ 2 The defen d an ts filed a motion for summ ary judgme nt, which the circ uit court g rante d. After the circ uit court denied the plaintiffs’ motion to re co n s i der, the plaintiffs timely
appea led the cir cuit court’s grant of summar y judgme nt.

¶ 3 BA CKGROUND ¶ 4 In 2005, Hea

rtland issued Ross a revolving line of cre dit in the amount of $ 6 5 0
, 0 0 0. Hea rtland rene wed the line of cre dit for t h e n ex t sever al y ear s. On April 1, 2009, afte r perf orming a full revie w of Ross’s financ ial condition (which inc luded a r eview of Ross’s then-c urre nt financ ial statements ), Hea rtland ag ain rene wed the loan, this time extending Ross a $750,000 revolving line of cre dit for one y ear secur ed by a promissory note executed by Ross (the Note). ¶ 5 The Note provided that Ross ag ree d to pay the loan “in one pay

ment of all outstanding principal plus all acc rued unpaid interest on April 1, 2010.” The Note require d Ross to make

-2-regular monthly pay ments of all acc rued unpaid interest due as of eac h pay ment date on the first of eac h month, beg inning on Ma y 1, 2009. Howeve r, the Note did not require Ross to make a ny principal pa

y ments until April 1, 2010. ¶ 6 The Note provided that “[u] pon d ef au l t , [ He ar t l an d] may decla re the entire unpa id principal balanc e under this Note and all acc rued unpaid interest immediately due, and then [R oss] will pay that amount.” The Note listed various events or conditions which “shall constitute an event of defa ult” under the Note, including “[t] he dissoluti on or termination of [R oss’s] exis tence as a g oing business” and “the insolvency of [R oss] .” The Note also stated that Hea rtland “will have no obligation to advanc e funds under th[ e] Note” if: “(a ) [R oss] or any g uara ntor is in defa

ult under the terms of this Note or any ag ree ment that [R oss] or any g uara ntor has with [Heartland], including any ag ree ment made in conn e c ti o n w it h th e s igning of this Note; or (b) [R oss] or any g uara ntor ce ases doing

business or is insolvent.” ¶ 7 M o re o ver, the Note stated that Ross “and any other party that signs, gu ar an t ee s , o r endorse s the Note, to t he ex tent allowed by law, waive presentment, demand for pay ment, and notice of

dishonor.” ¶ 8 Eac h of the g uara nty ag ree ments signe d by the individual g uara ntors provided that eac h
g uara ntor waived the rig ht to require Hea rtland to “make any prese ntment, protest, demand,

or notice of any kind
, i ncluding notice of any non-pay ment of the Indebtedne ss, or of any non-pay ment related to any

collater al, or a

ny notice of any action or non-ac tion on the part of the B orrowe r.” ( Emphasis added.) ¶ 9 Don Shafer was the loan office r for Hea rtland who handled the loan with Ross. On J uly 27, 2009, Shafer met with David Go er s , the president of Ross, and Mark Doolittle, a vice president of Ross, both of whom were guara ntors of Ross’s obligations under the Note. Goer s testified in his deposition that the purpose of the J uly 27, 2009, meeting was to inform Mr. Shafer of chang es that had rec ently taken place inside Ross, including the fac t that two of Ross’s share holders had resig ned that day

. Duri ng the meeting
, Goer s g ave Shafer a document detailing the measure s Ross was taking to deal with the rec essionary econo m y (such as cost reduc tions and other measure s) and descr ibing Ross’s cur rent business plan, including its plan for servicing exis ting clients and acquir ing new clients. The document also included cash flow projec tions. At the conclusion of the meeting
, Shafer asked Goer s to provide him with Ross’s updated balanc e sheet an d i ncome statement so he could revie w Ross’s curre nt financia l positi on. ¶ 10 The nex t morning
, Shafer s ent Goer s an e-mail stating that, in light of their discussion during the m eetingon J uly 27, 2009, Shafer was “sure” that Hea rtland would be requiring Ross’s owner s to provide Hea rtland with additional collater al in the form of cash, rea l estate,

or secur ities. Sh a fer stated that the amount of additional collater al would depend upon Ross’s

curr ent inventory
, rec eivables, and equipment balanc es, b u t h e g uessed it would be
approx i m at el y $ 500,000. In addition, Shafer told Goer s that Hea rtland might also require Ross’s owner s to pro vide a capital infusion of approximately $100,000, but he would not know for c erta in until he reviewe d Ross’s updated financ ial information. ¶ 11 During his deposition, Shafer testified that he sent this e-ma il to Goer s beca use Go er s had tol d him during the J uly 27, 2009, meeting that Ross was suffe ringlosses and that the

-3-decline in business had resulted in a drop in the company ’s rec eivables. Acc ording ly
, Shafer

was conce rned that the outstanding balanc e on the line of cre dit was substantially highe r than Ross’s exis ting collater al for the loan (which consisted of Ross’s rec eivables and inventory ), and he w anted to g et Ross back into a “ positive positi on.” ¶ 12 L ater that day
, Shafer rec eived Ross’s financ ial statement for the period ending J une 30, 2009. The statement indicated that R o s s ’s total capital was neg ative $256,771.12. After revie wing this financial stateme nt, Shafer told Goe rs that Hea rtland would require Ross to provide $500,000 in a dditional c ollatera l, plus a cash infusion of a pproxi mately

$300,000. ¶ 13 Shafer met with Goer s and four other owner s of Ross on J uly 29, 2009, to discuss these demands. Goer s and three other share holders who wer e prese nt at the meeting testified that S h af er t o l d them during the m eeting that if Ross or t he guar antors were not able to satisfy Shafer ’s demands for additional collater al and a cash infusi o n , Shafer would turn the l oan

o v er to Hea

rtland’s attorney s for collection ag ainst the guara ntors. Shafer denied that h e made this statement during the meeting

. At the time of the J uly 29, 2009, meeting
, the outstanding principal balanc e on the note was $690,000. After the meeting
, R o s s took an additional principal a dvance of $33,000. ¶ 14 Goer s and three other Ross share holders testified that, on or about September 11, 2009, Ross’s share holder s d ec i d ed that Ross could not meet Shafer ’s demands and, as a result, would have to close the business. Ross’s share holders met with Shafer ag ain on September 15, 2009, and told him that they wer e not able to meet his demands and that Ross would be closing the bus iness o n S ep tember 30, 2009. L ater that day
, Shafer terminated Ross’s line of cre dit, place d a hold on Ross’s chec king acc ount, and applied proce eds from Ross’s chec king a ccount to pay

the outstanding loan balanc e on the Note

. ¶ 15 During his deposition, Shafer testified that, when he lear ned on J uly 28, 2009, that Ross had a “neg ative net worth” of approximately $257,000, Hea rtland conclude d that Ross was insolvent and that the bank considere d this to be a “def ault situation” under the terms of the Note. ¶ 16 Howeve r, Thomas Sapp, the cer tified public acc ountant who prepa red Ross’s f

inancial statements, t est ified by aff idavit that, as of J une 30, 2009, and J uly 31, 2009, Ross was a g oing business that was able to a nd did pa y its de bts in the ordinary course of business and

was “not insolvent.” Sapp opined that Hea rtl an d ’s t er m ination of the cre dit line and place ment of a h o ld on Ross’s bank acc ount on or about September 15, 2009, “pre vented Ross from conducting business in the usual and customary manner .” Howeve r, Sapp opined that, befor e Hea

rtland took these actions, Ross was able to pay its debts and was n o t insolvent from August 31, 2009, through Septe mber 15, 2009. ¶ 17 On October 22, 2009, Hea rtland sent Ross and the g uara ntors a notice of defa

ult due to i nsolvency and closure of the business and a demand for pay ment of the outstandi n g principal a

nd interest under

the Note. ¶ 18 On Dec ember 3, 2009, Hea rtland filed a complaint and confe ssion of judgme nt ag ainst R oss in the circ uit court of Peoria County
, case number 09-L -365. Hea rtland obtained a judgme nt by confe ssion ag ains t R o s s in the amount of $731,166.33. Pursuant to I llinois Supreme Court Rule 276 (ef f. J uly 1, 1982), Ross filed a “Mot i o n t o Vac ate J udg ment by

-4-Confession,” which the circ uit court g rante d on Marc h 19, 2010.

¶ 19 He ar t l an d subsequently filed a motion for summary j u d gm en t

. I n o p p o s i t i o n t o Hea rtland’s mot ion, Ross argued that summary judgme nt was inappropriat e beca use t here

wer e g enuine issues of materia l fac t as t o wh et h er Hea rtland’s demand for additional collater al and a cash infusion cause d Ross t o go o u t of business, there by causing Ross to defa ult and making it impossibl e for Ross to perf orm its obligations under the Note. In addition, Ross arg

ued that there wer e g enuine issues of materia l fac t as to whether Hea rtland brea ched its duty of g ood faith and fair dealing
, there by excusing Ross’s defa ult, when Shafer (1) demande d that Ross provide additional cash a nd collater al at a time that Ross wa s “not insolvent” and “not in defa ult,” (2) informed Ross that Hear tland would terminate the line of cre dit and seek collection on the Note unless Ross met his demand, and (3) “unilater ally decide d to terminate Ross’s line of cre dit and remove funds without any notice whatsoeve r to Ross.” ¶ 20 The circ uit c ourt g rante d Hea rtland’s motion for summary judgme nt. The court’s or der
states that “ther e are no issues of materia l fac t” becau s e “[ d]efendant was in defa ult, as alleg ed, when it cea sed operations at the end of September, 2009,” and “[a]ny actions taken by Plaintiff prior to that date, w hich defendant alleg es caused the defa ult, wer e authoriz ed by the l oan documents.” Ross filed a motion to re consider, which t he circuit court denied. In explaining its ruling
, the court noted that it was undisputed that Ross went out of business, which was an ev en t o f defa ult under the Note. Moreove r, the court stated that it did not believe that Hea

rtland did any

thing improper or illega l when it asked Ross to provide additional collater al. The court also noted that Ross could have simply ref used to provide any additional collater al, but, instead, it voluntarily chose to g o out of business, trig g ering Hea rtland’s rig hts under the Note to demand pay ment and to fre eze and set o ff R o ss’s chec king acc ounts. Ross appea led. This court aff irmed t h e ci rcuit court’s judgme nt in Heartland Bank &Trust Co. v. Ross Adve rtising, Inc. , 2012 I LApp (3d) 100774- U. ¶ 21 Hea

rtland filed a separ ate action ag ainst the six individual g uara ntors in the circ uit c ourt of Peoria County seeking to collect o n t h e d eb t owed by Ross (ca se number 10-L -16). Hea rtland filed a motion for summary judgme nt. In opposition to Hea rtland’s motion, Ross raised the same arguments that it had raised in opposition to Hea rtland’s motion for summary judgme nt in case number 09-L -365. Although the circ uit court dismiss ed Hea rtland’s claims
ag ainst two of the g uara

ntors, it g rante d Hea

rtland’s motion for summary judgme nt ag ainst the four rema ining guara

ntors. This court aff

irmed the circ uit court’s judgme nt in Heartland Bank &Trust Co. v. Goe rs , 2012 I LApp (3d) 110030- U. ¶ 22 T he instant action involves a complaint filed by Ross an d fo u r o f t h e i n d i v i d u al
g uara ntors ag ainst Hea

rtland and S h af

er

. I n count I of the plaintiffs’ amende d complaint, Ross asser

ted a claim ag ainst Hea

rtland for brea ch of contra ct and “bre ach of the implied duty of g ood and fair dealing .” Ross alleg ed that Hea rtland brea ched the loan ag ree ment and
acte d arbi t ra rily in a manner i nconsistent with the parties’ expectations by terminating the line of cre dit without notice at a time when Ross was “not in defa ult.” Ross also alleg ed that Ross had “per formed all of its obligations” under the loan ag ree ment prior to Hea rtland’s brea ch and that He ar t l an d’s actions cause d Ross to g o out of business. In count I I
, Ross

asser ted a claim ag ainst Hea

rtland and Shafer for tortious i n t er fe re nce with contra ct and

-5-b u s i n ess relations. Ross alleg ed that Hea rtland and Shafer wilfully and unrea sonabl y demande d that Ross provide additional collater al and cash, under threat to withhold cre dit, knowing that Ross could n o t m ee t t hese demands. R oss alleg ed that Hea rtland and Shafer knowing ly cause d Ross to g o out of business and to lose exis ting and prospec tive customers. In count I I I
, the plaintiff guara ntors broug ht claims ag ainst Hea rtland and Shafer for tortious i n t er fe renc e with contra ct and business relations which were substantively identical to the claims that Ross asserted in c ount I I

. ¶ 23 Hea

rtland filed a motion for summary judgme nt. In support of its motion, Hea rtland filed
two “Reque sts for J udicial Notice” which attache d copies of the judgme nt order on the Note in case number 09-L -365 and the judgme nt ag ainst the individual g uara ntors in case number 10-L -16. The ci rc u i t co u rt g rante d Hea rtland’s motion. The circ uit court found that the defe ndants wer e entitled to act upon the Note and the individual g uara nty ag ree ments on the basis of R oss’s insolvency and that there was no g enuine issue of materia l fac t as to the defe ndants’ rig ht to call the loan, decla re a defa ult on the basis of Ross’s insolvency
, enfor ce their rig ht of setoff unde r the Note
, and enfor ce the guara nty agree ments. Acc ording ly , the
court found that Hea

rtland and Shafer did not brea ch their duty of g ood faith and fair dealing by taking these actions. The court found that th e p l ai n t i ff s’ alleg ation that Hea

rtland and Shafer acte d unrea sonably was based on the fac tually un s upportable premise that the defe ndants did not have a co n trac tual rig ht to call in the l oan, declare Ross in defa ult, and enfor ce the obligations of the g uara ntors. ¶ 24 In add i t i o n , the court took judicial notice of the judgme nts previously enter ed ag ainst Ross in the prior case s and found that those judgme nts “esta blish[ ed] both collater al estoppel and res judicata as to the issues that are require d to be ra i s ed b y [t he] plaintiffs to sustain their cause of action in this litigation.” Moreove r, the court found that the plaintiffs’ claims for tortious interfe renc e and punitive damag es wer e barr ed by the economic l o s s d o ctrine

announce d in Moorman Manufac turing Co. v. Nat ional Tank Co. , 91 I ll. 2d 69 (1982). ¶ 25 This appea l followed.

¶ 26 ANALYSI S ¶ 27 S u m m ar y j u d gm en t i s proper if the pleading s, depositions and admissions on fil e, toge ther with the aff

idavits, if any , show that there is no g enuine issue as to any materia l fac t and that the moving party is e ntitled to judgme nt a s a matter of law. 735 I L CS 5/ 2-1005(c ) (West 2008)

. The purpose of summary judgme nt is not to try a question of fac t, but simply
to deter mine whethe r a g enuine issue of triable fac t exis ts. W atkins v. Schmitt
, 172 I ll. 2d 193, 203 (1996); Samee r v. Butt
, 343 I ll. App. 3d 78
, 85 (2003). I n deter mining whether a
g enuine issue of materia l fac t exis ts, a court must construe the pleading s, depositions, admissions, and aff

idavits strictly ag ainst the movant and liberally in favor of the opponent. W atkins , 172 I ll. 2d at 203; Samee r , 343 I ll. App. 3d at 85. ¶ 28 A defe ndant moving for summary judgme nt bear s the initial burden of proof. Benson v. Stafford
, 4 0 7 I ll. App. 3d 902, 912 (2010). The defe ndant may meet its burden either by aff irmatively showing that some element o f t h e case must be resolved in its favor or by establishin g t h at there is an absenc e of evidenc e to support the plaintiff’s case

. Id. To

-6-withstand a defe ndant’s motion for summary judgme nt, a plaintiff need not prove its case but

must pre sent a fa ctual basis that would arguably entitle the plaintiff to a judgme nt. Allegro Servic es, Ltd. v. Metropolitan Pier & Exposition Authority
, 172 I ll. 2d 243, 256 (1996); Benson
, 407 I ll. App. 3d at 912; see also Hussung v. Patel
, 369 I ll. App. 3d 924, 931 (2007). In other words, the plaintiff “must prese nt enoug h evidenc e to cre ate a g enuine issue of fac t.” Hussung
, 369 I ll. App. 3d at 931. I f a plaintiff cannot establish an el em en t of her cause of action, summary ju d gment f o r th e d e f e ndant is proper

. Id. Moreove r, summary judgme nt may be g rante d on the basis of res judicata or collater al estoppel. Peregrine Financial Group, Inc.

v. TradeMave n, L.L.C

. , 391 I ll. App. 3d 309, 320 (2009); Schratzmeier v. Mahoney
, 246 I ll. App. 3d 871, 876 (1993). We revie w summary judgme nt ruling s de novo

. Espinoza v. Elgin, Joliet &Eastern Ry. Co. , 165 I ll. 2d 107, 113 (1995). ¶ 29 In this c ase, the circ uit court proper ly enter ed summary judgme nt f or Hea rtland. As the ci rc uit court corr ectly held, all of the claims asser ted by the plaintiffs are barr ed by t h e doctrine of res j udicata

. The doctrine of res judicata provides that a f inal judgme nt on the merits rende red by a court of competent jurisdiction bars any subsequent actions betwee n the

same parties or their privies on the same cause of action. Rein v. David A. Noyes & Co.
, 172 I ll. 2d 325, 334 (1996). Res judicata promotes judicial economy by preve nt i n g repe titive litigation and also protec ts parties from being forc ed to bear the unjust burden of relitig ating essentially

the same c ase. Arvia v. M adigan , 209 I ll. 2d 520, 533 (2004). ¶ 30 When res judicata applies, it bars all matters that wer e offe red t o s u stain or defe at a claim in the first action, as well as all matters that could have been offe red. Id. Moreove r, the doctrine bars a claim based on fac ts that would have constituted a counter claim in the ear lier
proce eding wher e succe ssful prosec ution of the later action “would either nullify the ear lier judgme nt or impair the rig hts established in the ear lier action.” City of Rock ford v. Unit Six of Policeme n’s Bene volent & Protective Ass’n, 362 I ll. App. 3d 556, 562-63 (2005); see also Fuller Family Holdings, LLC v. Northern Trust Co. , 371 I ll. App. 3d 605, 617 (2007). ¶ 31 For the doctrine to apply
, three require ments must be met: (1) there was a final judg ment

on the merits rende red by a court of competent jurisdiction; (2) there was an identity of cause of action; and (3) there was an identity of parties or their privies. Hudson v. City of Chicago
, 228 I ll. 2d 462, 467 (2008). ¶ 32 Eac h of these require ments is satisfied in this case

. In case numbers 09-L -365 and 10-L

16, final judgme nts wer e enter ed by courts of competent jurisdiction, and we have aff irmed those judg ments. In count I of the plaintiffs’ amende d complaint in this case, Ross asserts 1

Ross ar gues tha t “a fi nal adj udi cat ion on the m er it s has not bee n m ade whet her Hear tl and 1 bre ach ed it s con tr act ual obl igati ons to Ross .” Ross app ear s to sugg est tha t, bec aus e of thi s, Hear tl and

can not est abl is h tha t the re has bee n a “f ina l j udgm ent on the m er it s” in the pri or cas es, whic h is

re qui re d for the app li cat ion of res jud ic ata

. Ross app ear s to m is unde rs ta n d t h e “ f i nal j udgm ent ”

re qui re m ent

. T o sat is fy tha t re qui re m ent , Hear tl and nee d onl y est abl is h tha t the pri or li ti gatio n end ed in a fi nal j udgm ent on the m er it s tha t was re nde re d by a cou rt of compete nt j uri sdi ct ion

. Ross doe s not and can not dis put e tha t the j udgm ent s re nde re d in cas e numbers 09- L- 365 and 10- L- 16 sat is fi ed tha t re qui re m ent

. Ross ’s ar gum ent app ear s to con fus e the fi nal j udgm ent re qui re m ent wit h one of the re qui re m ent s for the app l i c a ti on of col la te ra l est oppe l, namely, tha t “an is sue of fa ct or la w”

-7-a claim ag ainst Hea rtland for brea ch of contra ct and “bre ach of the implied duty of g ood and fair dealing .” In support of this claim, Ross alleg es that Hea rtland, acting throug h Shafer
, brea ched the loan ag ree ment and acte d arbitra rily in a manner inconsistent with the parties’ expectations by terminatingthe line of c redit without notice at a time when Ross was “not in defa ult.” Ross also alleg es that Ross had “per formed all of its obligations” under the loan
ag ree ment prior to Hea

rtland’s brea ch and that Hea rtland’s actions cause d Ross to g o out of business. Moreove r, Ross alleg es th at He artland “bre ache d its implied and express obligations of g oo d fa i t h” in various dealing s with Ross. For example, in the complaint’s
gen era l alleg ations, which Ross restate s and rea lleg es in count I
, Ross asser ts th at S h af

er “ar bitrarily demande d” that Ross provide additional collater al and a substantial cash infusion at a time whe n Ross was not in default. ¶ 33 Ross raised the identica l cl ai m s i n o p p o s i t i on to Hea rtland’s motion for summary judgme nt i n case number 09-L -365. I n that case , Hea rtland m oved for summary judgme nt

on its complaint, which alleg ed that Ross had defa ulted on the Note. Ross argued, inter alia
, that summary judgme nt was inappropria te beca use there wer e g enuine issues of materia l fac t

as to whether Hea

rtland breach ed its duty of g ood faith and fair dealing when Shafer demande d that Ross provide ad d itional cash and collater al and terminated Ross’s line of

cre dit without notice at a time that Ross was “not in de fault.” In addition, Ross arg ued that
t h er e we re g enuine issues of materia l fac t as to whether Hea rtland’s actions (including Shafer ’s demand for additional co l l at er al and a cash infusion) cause d Ross to g o out of business, thereby causing Ross to default and makingit impos sible for Ross to perfor m its obligations under the Note. T he trial c ourt reje cted Ross’s def enses, a nd we a ffirme d. ¶ 34 Acc ording ly , count I of Ross’s c omplaint in this c ase raises the “same ca use of a ction” that was litigated and decide d in case number 09-L -365. In deter mining whether there is an identity of cause s of action for purposes of res judicata
, I llinois courts apply a “tra nsactional”
test. River Park, Inc. v. City of Highland Park
, 184 I ll. 2d 290, 311 (1998). Under this test,
separ ate claims will be considere d the same cause of action if they arise from a single g roup of operative fac ts, reg ardle ss of whether they asser t differ ent theories of relief

. Id. Her e, the claims asser

ted by Ross in both case s arise from the same loan transac tion betwee n Ross and Hea rtland and involve the same actions taken by Hea rtland and Shafer

. The very actions that Ross now claims constituted a brea ch of contra ct by Hea rtland ( i.e.
, Hea

rtland’s termination of the line of cre dit without notice at a time when Ross was “not in defa ult”) formed the basis of Ross’s de fense in the prior action. Ross conce des that Ross’s claims in this case involve the “same ca

use of a ction” under

the transa ctional test. ¶ 35 Moreove r, the parties named in count I of Ross’s complaint in this case are the same a s,

or in privity with, the parties in case number 09-L -365. Case number 09-L -365 was broug ht by Hea rtland ag ainst Ross. In count I of its complaint in this case , Ross named Hea rtland and Shafer
, one of Hea

rtland’s loan office rs, as defe ndants. The addition of Shafer as a defe ndant

re le vant to the cur re nt li ti gatio n was “ac tua ll y li ti gated and det er m ine d by a valid fi nal j udgm ent .” (I nte rna l quot at ion m ar ks o m it te d.) Du Page Fork li ft Serv ic e, Inc

. v. Ma te ri al Handl ing Ser vi ces , Inc

. , 195 I ll . 2d 71, 7 9 ( 2001 ).

-8-in this case does not undermine the identity of the parties or otherwise defe at the application

of r es j u d i ca ta

. “[W ]hen a prior judgme nt is a bar to a claim ag ainst an employ er, a claim
ag ainst an employ ee, predic ated upon the same acts, is also barr ed.” Bonanno v. La Salle & Bureau County R.R. Co.
, 87 I ll. App. 3d 988, 995 (1980); see also Towns v. Y ellow Cab Co.
, 73 I l l

. 2 d 113, 123-24 (1978); Neuberg v. Michae l Ree se Hospit al & Medic al Center
, 118 I ll. App. 3d 93, 100 (1983). Ross’s claims ag ainst Shafer in this case a re pr edicated on the

same acts that formed the basis of Ross’s defe nses ag ainst Hea rtland in c ase number 09-L

365 ( i.e.
, Shafer ’s alleg edly “ar bitrary” demand for additional capital and a cash infusion and his alleg edly prema

ture termination of Ross’s line of cre dit). Be cause the trial court reje cted Ross’s defe nses in case number 09-L -365, Ross may not rea ssert these claims ag ainst Shafer in this case

. Nor may Ross avoid the bar of res judicat a m er ely by naming Shafer as a defe ndant. See Michae l Ree se Hospital
, 118 I ll. App. 3d at 100 (holding that the plaintiff’s “attempt to name additional [employ ee] defe ndants to avoid the applicability of the doctrine of res judicata ” was “without leg al eff ect” ). In an y ev en t, as an employ ee of Hea rtland, Shafer is in privity

with Hear

tland for purposes of res judicata

. See, e.g. , Henry v. Farme r City State Bank

, 808 F.2d 1228, 1235 n.6 (7th Cir. 1986) (holding that even though a bank was the only

actua l party

in the first ac tion, the other defendants in the s econd action wer e in privity wi t h the bank for purposes of res judicata beca use they wer e direc tors, office rs, employ ees, a

nd attorney s of the bank)

. ¶ 36 Ross argues that res judicata does not apply here beca use, in case number 09-L -365, the circ uit court held only that Ross brea ched its contra ctual obligations to Hea rtland but did not deter mine whether Hea

rtland brea ched its contra ctual obligations to Ross. We disag ree

. As noted above, res j udicata does not mere ly bar all matters that wer e actuall y p re s en t ed and decide d in the first action; it also bars all matters that could have been prese nted and decide d i n t h at action. Arvia
, 209 I ll. 2d at 533; River Park
, 184 I ll. 2d at 302. Acc ordi n gl y , t h e doctrine ba

rs a c laim ba sed on fac ts that would have c onstitut ed a de fense or counte rcla im in the ear lier proce edi n g where succe ssful prosec ution of the later action “would either nullify the ear lier judgme nt or impair the rig hts established in the ear lier action.” City of Rock ford
, 362 I ll. App. 3d at 562-63. Her e, althoug h Ross arg ued in case number 09-L -365 that Hea rtland brea ched its duty of g ood faith, it did not expressly argue that Ross brea ched the terms of the loan documents. Neve rtheless, Ross c ould ha ve raised the latter claim as a defe nse or as a counter claim in case number 09-L -365. Moreove r, if Ross wer e to preva il on its curr ent claim t h at He artland brea ched the loan documents, that would nullify the judgme nt rende red in case number 09-L -365. In reje cting Ross’s defe nses in that case , both the circ uit court and this court found t h at t he very actions that Ross now claims wer e contra ctu al b re aches by Hea rtland wer e both appropr iate and authorized by the loan documents. A c ontrary

ruling in this case would ef fec tively annul that judg ment. ¶ 37 Acc ording ly
, the circ uit court’s judgme nt in case number 09-L -365, and our aff irmance of t hat j udg ment, constitutes a fi n al j udg ment on the m erits t hat conclusively resolved the claims that Ross asser

ts ag ainst Hea

rtland in count I of his complaint in this case

. The claims raised in c ount Iof Ross’s complaint are there fore barr ed by res judicata

. ¶ 38 The claims raised in counts I I and I I I of Ross’s complaint are al s o b ar red. In count I I
, Ross asser

ts a claim ag ainst Hea

rtland and Shafer for tortious interfe renc e with contra ct and

-9-“business relations.” In support of this claim, Ross alleg es that Hea rtland and Shafer wilfully and unreasonably demande d that Ross provi d e ad d i t i onal collateral and cash, under threat
to withhold cre dit, knowing that Ross could not meet these demands. Ross alleg es t hat, i n perf orming these actions, Hea rtland and Shafer knowing ly cause d Ross to g o out of business and to lose exis ting and prospec tive customers. Ross’s tortious interfe renc e claim arises out of the same g roup of operative fac ts as Ross’s defe nses in case number 09-L -365, which the circ uit court reje cted. The basis for Ross’s alleg ed liability in count I Iare the same a ctions by Hea rtland and Shafer that the circ uit court found to be appropr iate and authorized by the loan documents in case number 09-L -365. Acc ording ly
, the claim is barr ed by res judicata
, even though it asser

ts a theory of relief that was not litigated in case number 09-L -365. River Park
, 184 I ll. 2d at 311. Moreove r, Ross could have raised its tortious interfe renc e claim as

a counter claim in case number 09-L -365. Fur ther, if Ross wer e to preva il on i t s t o rt i o us interfe renc e claim ag ainst Hea rtland an d S h afe r, the judgme nt in case number 09-L -365 would be nullified, beca use that j udg ment depende d upon the trial court’s finding that Heartland’s actions wer e appropr iate, justified, and authorized by the loan docu m en t s

. A finding that Hea

rtland and Shafer t o rt i o u s ly interfe red with Ross’s curr ent or prospec tive clients by perf

orming the same actions would nece ssarily invalidate that judgme nt, beca use i t would entail a finding that Hea rtland’s and Shafer ’s actions wer e an “intentio n al an d unjustif ied inducement” of a brea ch of contra ct. (Emphasis added.) (Interna l quotation marks omitted.) HPI Health Care Servic es, Inc. v. Mt. Vernon Hospital, Inc.
, 131 I ll. 2d 145, 154- 5 5 (1989). For this additional rea son, res judicata bars Ross’s claim in count I I

. Ci t y o f Rock ford , 362 I ll. App. 3d at 562-63. ¶ 39 Count I I I is barr ed for simil ar rea sons. In count I I I
, the plaintiff g uara ntors asser

t c laims
ag ainst Hea

rtland and Shafer for tortious interfe renc e wi th c o ntr a c t which are near ly identical in substanc e to the claims that Ross asserted in count I I . Specifica lly
, the g uara ntors alleg e that Hea rtland and Shafer arbitrar ily demande d that Ross provide additional collateral a nd cash, under threat to withhold cre dit, knowing that Ross could not meet these demands and that Ross would g o out of business as a result. The guara ntors alleg e that, in perf

orming these actions, Hea

rtland intentionally cause d Ross to g o out of business. The g uara ntors also alleg e that Hea rtland and Shafer h ad a duty to ref rain from interfe ring with the g uara ntors’

acc ommodations and contra cts of guara nty , and that Hea

rtland and Don Shafer violated this duty by interfe ring with Ross’s contra cts and busi ness relations, causing Ross to g o out of business. Fur

ther, the g uara

ntors alleg e that, as a direc t and proxi mate result of Hea rtland’s and Don Shafer ’s conduct, Ross went out of business and was unable to satisfy the loan, there by leavingthe guara

ntors with the liability

for r epay ment of the loan. ¶ 40 This claim is barr ed by the decision of the circ uit court of Peoria County in case number 10-L -16. In that case , Hea rtland filed an action ag ainst the six individual guara ntors seeking to collect on the de bt owed by Ross unde r the Note. He artland f iled a motion for summary judgme nt. In opposition to Hea rtland’s motion, Ross a

rgued that Hea

rtland, acting throug h Shafer
, had arbitra

rily demande d ad d i t i o n al collater al and cash, causing Ross to g o out of business and there by trig g ering the g uara ntors’ liability under the g uara nty ag ree ments. The circ uit court reje cted the g uara ntors’ defe nses and g rante d summary judgme nt for Hea rtland. We aff irmed the circ uit court’s judgme nt. The guara ntors’ claim for tortious interfe renc e in

-10-this case is based on the same g roup of operativ e fa ct s as the g uara ntors’ defe nses in case number 10-L -16. Moreove r, case nu m b er 10-L -16 involved the same parties plus Don Shafer
, who, as shown above, is c onsidered identical to or in pr ivity with H ear tland for res judicata purposes. The claims raised i n count I I I are there fore barr ed by res judicata

. See City of Rockford , 362 I ll. App. 3d at 562-63. 2 ¶ 41 Ross’s claims ag ainst Hea rtland and Shafer fail for additional rea sons. First, in count I
, Ross purports t o asser

t a ca use of action for “bre ach of the i mplied covena nt of good faith and fair dealing .” Howeve r, our supreme court has expressly declined to rec og nize such a

cause of ac tion. Voyles v . Sandia Mortgage Corp. , 196 I ll. 2d 288, 293-94 (2001). ¶ 42 M o reover, mos t of t he factual and leg al i ssues centr al t o Ross’s claims in this case are barr ed by collater al estoppel. Collateral estoppel, also refe rre d to as issue prec lusion, is an equitable doctrine that promotes fairne ss and judicial economy by preve nting the relitig ation of fac tual or leg al issues that have alre ady been resolved in ear lier actions. Du Page Forklift Servic e, Inc. v. Material Handling Servic es, In c. , 195 I ll. 2d 71, 77 (2001). Under the doctrine of collater al estoppel, “[w]hen an issue of fa ct o r l aw is actua lly litigated and deter mined by a valid and final judgme nt, and the deter mination is essential to the judgme nt, the deter mination is conclusive in a subsequent action betwee n the parties, whether on the

same or a differ ent claim.” (Interna l quotation marks omitted.) Id. at 79. Collateral estoppel
may be applied when the issu e decide d in the prior adjudication is identical with the one prese nted in t h e cu rr en t action, there was a final judgme nt on the merits in the prior ad j u d i ca t ion, and the party ag ainst whom estoppel is asser ted was a party to, or in privi t y with a par ty to, the prior adjudication. Id. ¶ 43 I n re

j ec ting Ross’s defe nses and g ranting summary judgme nt for Hea rtland i n ca s e number 09-L -365, the circ uit court held that Ross was “in defa ult” when it cea sed operations
at the end of September 2009, and “[a]ny actions t ak en b y [Heartland] prior to that date, which [R oss] alleg es cause d the defa ult, wer e authorized by the loan docume nts .” (Emphasis added.) Thus, the circ uit court nece ssarily found that Hea rtland did not brea ch its contra ctual obligations to Ross. I t also reje cted Ross’s defe nse that Hea rtland brea ched its duty of g ood faith, the same claim that Ross raises in this case

. In aff irming the circ uit court’s judgme nt,

we also held that Hea

rtland had not brea ched its duty of g ood faith and fair dealing and that Hea rtland’s decision to close the line of cre dit without notice when it did wa s “ex pressly authorized by the Note.” Heartland Bank & Trust Co. v. Ross Adve rtising, Inc.
, 2012 I L App (3d) 100774-U, ¶ 40. In addition, we held that Ross had failed to alleg e fac ts which arguably
sug g est that Hea

rtland cause d Ross to g o out of business. Eac h of these fac tual finding s and leg al conclusions was essential to the final judgme nt in case number 09-L -365, beca use the
t ri al co u rt could not have reje cted Ross’s defe nses and g rante d summary judgme nt for Hea rtland without m ak i n g t hose finding s. Moreove r, Ross raises the identical fac tual and

Mo re over, in the guaran ty agree m ent s, the guaran tor s wai ved the ri ght to ass er t cl ai m s li ke 2 tho se ass er te d in cou nt I I I

. Eac h of the ind ividu al guaran ty agree m ent s pro vides tha t “Gua ra nto r *** wai ves and agree s not to ass er t or cl ai m at any ti m e any ded uct ion s to the amount guaran te ed unde r thi s Guar ant y f

or any cl ai m of set off

, cou nte rc la im, c ount er demand, re cou pm ent or si m il arri ght, whet hersuc h cl ai m

demand or ri ght m ay be a sse rt ed b y the Bo rr ower , th e Gua ra nto r, o r b oth .”

-11-leg al issues in this case ( i.e.
, whether Hea rtland brea ched the loan documents or its duty of
g ood faith when Shafer demande d additional collater al and ca sh and terminated the line of

cre dit, whether Ross was in defa ult at the time Sha fer terminated the line of cre dit, and whether Hea

rtland’s and Shafer ’s actions cause d Ross to g o out of business). In ad d i t ion, Ross was a party to the prior litigation. Thus, collater al estoppel applies, and Ross may not relitig ate the fac tual and leg al issues deter mine d in case number 09-L -365. Be cause these fac tual and leg al issues are centr al to Ross’s claims in this case , Ross’s claims in counts I and I Icannot survive

. ¶ 44 Be cause we find that all of the plaintiffs’ claims are barr ed by res judicata or collater al estoppel, we do not need to addre ss Hea rtland’s other arguments for aff irming the circ uit court’s judg ment.

¶ 45 CONCL USI ON ¶ 46 For the fore g oing rea sons, we aff irm the judgme nt of the circ uit court of Peoria County
g rantingHea

rtland’s a nd Shafer ’s motion for summary judgme nt.

¶ 47 Affir

med.

-12-